European Council

Michael Fabricant Excerpts

Monday 17th December 2012 Commons Chamber

[The Prime Minister]

My hon. Friend asks a good question. Because of the success of the European Central Bank in calming the markets, there is perhaps less pressure on the eurozone countries to take the steps that many analysts believe they need to take. The reason why I think it will take time is that these are difficult issues for sovereign countries. As I have said, one issue that was discussed only in outline form at the Council was the idea of contracts between Governments and the European Commission. I do not know how such contracts will go down in other European countries, but I suspect that they would go down rather badly if we proposed them here. These are difficult issues that it will take time to discuss. We need to think about that as we calibrate our response.

[Michael Fabricant (Lichfield) (Con)]

Anders Borg, the Swedish Finance Minister, said that when the financial transaction tax was introduced in Sweden,

“between 90%-99% of traders in bonds, equities and derivatives moved out of Stockholm to London”.

What steps has the Prime Minister taken to ensure that we do not find that such a tax is imposed in the UK, which is what the Labour party wants, and that our traders do not all go to New York and Zurich?

[The Prime Minister]

My hon. Friend makes an important point. Anders Borg is an excellent Finance Minister. The Chancellor of the Exchequer and I work very closely with him. I believe that if a financial transactions tax is not introduced simultaneously around the world, the transactions will just go to the lowest-cost destinations. That is why it is totally self-defeating. The European Commission’s own piece of work on such a tax showed that it would cost hundreds of thousands of jobs and millions of pounds of revenue, not just in the UK, which has a large financial services industry, but in the rest of Europe.